Get the Right Mix of Bricks and Clicks

Get the Right Mix of Bricks and Clicks

Barnes & Noble used the spin-off approach where it spun off a completely separate division called barnesandnoble.com, which ultimately spun off as a stand-alone company. This strategy, while it allowed for a greater focus and more flexibly, did not end up working out for Barnes & Noble. Because they were so separate, they ended up competing with each other rather than working together. For instance, the company sacrificed a great deal of marketing opportunities by not promoting the website in the stores. Moving to the right of the Clicks and Mortar Spectrum is Rite Aid, who used the strategic partnership approach. Rite Aid took an approach, unlike some of its competitors, centered on partnership rather than ownership. Creating a virtual partnership, Rite Aid bought an equity stake in Drugstore.com. For them, it made more sense to go this route rather than spend money and take time developing and managing their own website. Rite Aid and Drugstore.com are both separately owned and managed, however unlike Barnes & Noble, they do promote each other through advertising and other means in both channels. KB Toys used the approach of a joint venture when deciding to virtually integrate. KB Toys joined forces with KBkids.com and brainplay.com, and although they appear to be completely separate, the two companies are tightly integrated in certain respects. The physical store promotes the website through in-store advertising and displays. Anything purchases online can be returned to any of the KB Toys stores, which most e-tailers cannot match. Also because of this integration, they can consolidate purchases giving each company more purchasing leverage than most e-tailers. KB Toys and KBkids.com each have members on each other board of directors to encourage frequent communication. Lastly, Office Depot used the in-house division approach. This approach has been extremely successful for Office Depot. The company created officedepot.com because it already had an existing...

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